The money-lending firm Wonga, the current shirt sponsors of Newcastle FC, has agreed to write off the debts of more than three hundred thousand customers. It follows a review from the financial watchdog which requires the firm to make significant and immediate changes to its business. The decision means that 330, 000 people who are currently in 30 days of arrears with Wonga which have the balance of their loan written off and will owe the company nothing.
Meanwhile, around 45,000 customers who are up to 29 days in arrears will be asked to repay their debt without interest and charges and will be given an option of paying off their debt over an extended period of four months.
Wonga's new chairman has spoken about the move, confirming that it comes following concerns from the Financial Conduct Authority.
The Department for Business has issued a statement after the release of a report today that concluded that the number of people relying on quick, high interest loans is rising.
The Government is currently looking at whether any action needs to be taken to address the problem, and about what action it might take.
Read the full statement from them below:
The number of people relying on quick, high interest loans is rising. The Centre for Responsible Credit says companies should share information about customers who are already in debt. The change would protect low income borrowers from irresponsible lenders.
Kath Simms and Kath Carter, both from Stockton, have stuggled with loans for years. They told ITV how easy it is to fall into financial ruin.
Two Stockton mothers are warning others of the risks of taking out taking out high-interest loans. They say vulnerable people are being targeted by companies who knock on people's doors and are becoming 'the norm' and 'a credit line' for those who find it difficult to live within their means.
Teesside debt charity Thrive supports hundreds of people with cash problems.
Community organiser Greg Brown says, “We try to advise people on alternatives to high interest loans. We encourage people to stick up for themselves, challenge lenders and get what they are entitled to. We know what rights people have and help send people on the right way.”
Freedom of Information requests were sent to almost every council in the region. Some were unable to provide exact figures. The full breakdown of council tax arrears from North East councils who responded to our Freedom of Information requests is listed below:
- Durham County Council: £23,320,942
- Newcastle City Council: £15,673,796
- Darlington Borough Council: £4,179, 119
- Sunderland City Council: £9,500,000
- Gateshead Borough Council: £7,025,726
- Northumberland County Council: £12,994,114